Why in the News?

The Union Cabinet’s recent approval of a ₹7,280-crore scheme to establish integrated facilities for manufacturing Rare Earth Permanent Magnets (REPM) underscores India’s urgent drive towards self-reliance in Rare Earth Elements (REEs).

What Are Rare Earth Elements (REEs)?

Rare Earth Elements (REEs) comprise a group of 17 metallic elements essential for modern technologies due to their unique magnetic, luminescent, and catalytic properties. Despite their name, REEs are relatively abundant in the Earth’s crust, but their extraction and processing are challenging because of dispersed deposits, complex ore compositions, and associated environmental risks like radioactive byproducts.

Classification and Properties

REEs are categorized into:

• Light REEs (LREEs): Including lanthanum (La), cerium (Ce), praseodymium (Pr), neodymium (Nd), samarium (Sm). These are more common and vital for catalysts, alloys, and glass applications.
• Heavy REEs (HREEs): Such as dysprosium (Dy), terbium (Tb), europium (Eu), yttrium (Y). Rarer and more valuable, they enhance high-performance magnets and electronics.

Key properties include:

• Magnetic Strength: Neodymium-based magnets (NdFeB) provide exceptional power for compact devices like EV motors and wind turbines.
• Optical and Catalytic Traits: Enable efficient LED displays, fiber optics, and pollution control in vehicles.
• Thermal and Conductive Qualities: Support aerospace alloys and superconductors.

Global demand is surging, projected to increase 7-10 times by 2040, driven by the energy transition. However, supply is monopolized, leading to price volatility and geopolitical risks, which directly impact import-dependent nations like India.

India’s Position in the Global REE Landscape

India holds the world’s fifth-largest REE reserves (6.9 million tonnes), concentrated in monazite sands along coastal regions. Yet, domestic production is negligible, with 100% reliance on imports for processed REEs. This gap exposes critical sectors: EVs (requiring 1-2 kg REEs per vehicle), renewables (200 kg per wind turbine), and defense (missile guidance systems). Connecting this to broader vulnerabilities, China’s dominance amplifies supply chain disruptions, as seen in past crises, pushing India towards integrated development.

China’s Dominance as a Geopolitical Strategy

• China’s control over REEs is a calculated tool of influence, evolving from market flooding to strategic restrictions. Starting in the 1990s, state-backed mining at sites like Bayan Obo captured global shares through low costs and minimal regulations. By 2010, export quotas amid territorial disputes spiked prices, forcing diversification elsewhere. Recent moves, like the 2024 curbs on seven REEs during US trade tensions, prioritize domestic needs in EVs and renewables, where China holds 60% market share.
• This strategy creates asymmetries: disrupting supplies to coerce policy shifts, as in Australia’s case. For India, as a Quad member, it delays localization efforts, highlighting the need for countermeasures to safeguard economic and security interests.

Key Features of India’s REE Self-Reliance Push

To address these challenges, the government is rolling out comprehensive schemes focusing on exploration, processing, and end-use manufacturing, building a seamless value chain.

The REPM Scheme

• Scope and Funding: Targets integrated production from REE oxides to alloys and magnets over seven years, with a total outlay supporting ecosystem development worth ₹34,300 crore.
• Key Components: Subsidies for capital (up to 50%), technology transfers via IREL, and linkages to PLI schemes for EVs and renewables.
• Strategic Locations: Facilities in Andhra Pradesh, Odisha, Tamil Nadu, focusing on high-potential reserves like beach sands.

Broader Initiatives Under National Critical Mineral Mission (NCMM)

• Exploration and Mining: Auctions for 30 critical minerals, including REEs, with seabed nodule ventures in the Indian Ocean.
• Processing Upgrades: Expanding IREL capacities in Odisha and Tamil Nadu to 10,000 MT/year.
• International Collaborations: KABIL’s overseas acquisitions (e.g., lithium in Argentina) to diversify sourcing.

These steps connect exploration to application, ensuring raw materials feed into high-value products like REPMs.

Challenges in Achieving Self-Reliance

Despite promising reserves, several hurdles impede progress, requiring coordinated solutions to avoid perpetuating dependencies.

Technical and Resource Constraints

• Underdeveloped Exploration: Only 10% of potential sites mapped, with atomic mineral restrictions limiting private involvement.
• Processing Gaps: Lack of commercial separation tech leads to exporting raw ores and re-importing products.
• Environmental Issues: Thorium co-products demand safe handling, complicating projects in eco-sensitive areas.

Geopolitical and Economic Barriers

• Market Volatility: Fluctuating global prices deter investments.
• Skill and Infrastructure Deficits: Need for specialized R&D and workforce training.

Challenge	Impact	Mitigation Strategy
Exploration Limits	Underexploited 6.9 MT reserves	Amend MMDR Act for private auctions; enhance geological surveys.
Processing Tech Gap	100% import reliance	JV with Japan/Australia for hydrometallurgy transfer.
Environmental Risks	Project delays due to thorium	Adopt green mining protocols; IAEA-compliant waste management.
Geopolitical Exposure	Supply disruptions from China	Quad partnerships; diversify via Vietnam/Australia.

Overcoming these will ensure a resilient supply chain, linking domestic strengths to global opportunities.

Implications for India’s Future

• The REE initiative has transformative potential, decoupling growth from external risks while fostering innovation. Economically, it could generate ₹10,000 crore in exports and support a $50 billion green sector by 2030. Technologically, it enables EV localization (30% market by 2030) and renewable expansion (500 GW target), reducing costs and emissions.
• Geopolitically, it strengthens strategic autonomy, countering China’s leverage through alliances like Quad’s Critical Minerals Dialogue. However, success depends on execution: balancing ESG concerns to prevent social conflicts in mining areas, and integrating with broader policies like Net-Zero 2070. Critically, without rapid scaling, India risks missing the green transition window, emphasizing the need for sustained investment and reforms.

Conclusion

India’s pursuit of REE self-reliance, anchored by the REPM scheme and NCMM, represents a strategic response to global chokepoints, transforming vulnerabilities into opportunities for sovereign growth. By harnessing domestic reserves, advancing processing, and forging partnerships, it can secure supplies for EVs, defense, and renewables. Yet, addressing technical, environmental, and geopolitical challenges is essential to build a robust ecosystem. Ultimately, this endeavor will define India’s role in the critical mineral’s era, ensuring sustainable development and technological leadership.

Rare Earth Elements (REEs)

Rare Earth Elements consist of 17 chemically similar metals: the 15 lanthanides (La to Lu) plus scandium and yttrium. Despite the name, they are relatively abundant in the Earth’s crust but rarely occur in economically extractable concentrations.

Key characteristics

• High melting points, density, electrical and thermal conductivity
• Divided into Light REEs (Lanthanum to Samarium) and Heavy REEs (Europium to Lutetium + Yttrium)
• Highly reactive, excellent magnetic, luminescent and catalytic properties

Main mineral sources

• Bastnäsite, monazite, xenotime (primary sources)
• Loparite and ionic adsorption clays (especially for heavy REEs)
• Usually found mixed with other minerals, never in native form

Major Applications of REEs

Even in tiny quantities, they are irreplaceable in modern technology:

• Clean energy: Neodymium, praseodymium, dysprosium and terbium in high-performance permanent magnets for electric vehicle motors and wind turbines
• Electronics & lighting: Europium and terbium as phosphors in LEDs, displays and fluorescent lamps
• Defence & aerospace: Precision guidance systems, jet engines, radar, sonar and laser targeting
• Healthcare: MRI contrast agents, X-ray systems, surgical lasers
• Oil refining & catalysis: Lanthanum and cerium in fluid catalytic cracking to produce gasoline
• Nuclear: Gadolinium and samarium in control rods and neutron absorption
• High-strength alloys: Added to magnesium, aluminium and steel for aerospace and automotive use

Global and Indian Reserve-Production Scenario (as of 2024–2025)

World reserves: ~120 million tonnes REO equivalent

• China: 44 Mt (37%)
• Vietnam, Brazil, Russia: next largest
• India ranks 5th with ~6.9 million tonnes of contained REO (mostly in beach sand monazite)

Production (2024 estimates)

• China: 240–270 kt REO (~70% of global supply) plus ~90% of refined products and ~90–95% of permanent magnets
• Australia, USA, Myanmar, Russia and others make up the rest
• China still processes almost all heavy REEs globally

India

• 5th largest reserves but production <1% of global output
• Almost 100% import-dependent for separated REE compounds and magnets
• Monazite-rich beach sands in Odisha, Andhra Pradesh, Tamil Nadu and Kerala are the primary resource

Strategic Importance

• Demand is projected to grow 5–9× by 2030–2040, driven by EVs, renewables and defence
• Extreme supply-chain concentration (far higher than oil) creates vulnerability
• China has previously weaponised export quotas (2010 Japan embargo, recent gallium/germanium restrictions)
• Rising prices: NdPr oxide doubled from ~$70/kg in 2020 to $150–200/kg in 2024–25
• India’s import bill and forex pressure will increase sharply as domestic EV/wind manufacturing scales

Why India Produces Very Little Despite Large Reserves

1. Monazite is classified as an “atomic mineral” because of co-occurring thorium → mining restricted to government entities only (IREL and KMML)
2. Private sector banned from beach-sand mining since 2016–2019
3. IREL’s main revenue comes from ilmenite, rutile, zircon, not REEs → low incentive to invest in separation and refining
4. Outdated technology and negligible private/academic R&D participation
5. Fragmented exploration efforts and regulatory overlap

Recommended Measures to Unlock India’s REE Potential

1. Remove REEs from the atomic minerals list (except when thorium concentration exceeds threshold) to allow private mining and processing
2. Permit private companies to mine beach sands with strict condition to return thorium-bearing monazite to government
3. Create a dedicated Department of Rare Earths & Critical Minerals under Ministry of Mines
4. Set up an independent regulator (Rare Earth Regulatory Authority)
5. Restructure IREL: separate thorium-related activities (keep under DAE) and create a new commercially-driven REE entity
6. Incentivise private investment in downstream separation, metal-making and magnet production through PLI-type schemes
7. Consolidate exploration under a single advanced centre (National Centre for Mineral Targeting)
8. Build strategic stockpiles of key REE compounds and magnets
9. Accelerate overseas acquisition and joint ventures through KABIL and partnerships with Australia, USA, Japan, Vietnam, Africa

Implementing these reforms can transform India from a near-total importer to a significant global player in the rare earth supply chain within this decade.

Source: Can India become self-reliant in REE production? – The Hindu

UPSC CSE PYQ

Year	Question
2017	“In spite of adverse environmental impact, coal mining is still inevitable for development”. Discuss.
2019	What are the economic significances of discovery of oil in Arctic Sea and its possible environmental consequences?
2021	Despite India being one of the countries of Gondwanaland, its mining industry contributes much less to its Gross Domestic Product (GDP) in percentage. Discuss.
2025	Mineral resources are fundamental to the country’s economy and these are exploited by mining. Why is mining considered an environmental hazard? Explain the remedial measures required to reduce the environmental hazard due to mining.